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Hello,
We are considering buying a new construction home in a sub division that has about 70% of the homes built. The builder we are working with builds very nice homes (2x6 construction, hardwood floors, granite countertops, etc.) and our lot would be one of the largest in the development. This builder is going to build about 30 more homes.
In another part of the sub division, a new builder is coming in and building spec homes (about 80) that will be of much lower quality. They will sell for about $100k less than ($250k vs $350k) the home we are looking to build. This new builder is literally building all 80 homes at once, on very small lots and they will obviously be starter homes.
Our concern is that these new homes will bring down the value of our home and the other 100+ homes that are of the same quality as the home we are looking at building. Other than this, the neighborhood is very nice and has everything we are looking for. We just don't want to build a home for $340k, only to have it devalued by the other starter homes. The financial aspect isn't the only factor as we really do like the neighborhood and plan on living in it for the foreseeable future, we don't want to make a poor financial decision. There aren't a lot of other neighborhoods like this one and it is in a good school district. Does anyone have experience with situations like this?
...in a sub division that has about 70% of the homes built.
In another part of the sub division, a new builder is coming in and building spec homes...
Our concern is that these new homes will bring down the value of our home and the other 100+...
Other than this, the neighborhood is very nice and has everything we are looking for.
Come back in five years to buy or find the 5 (or 20) year old version of this neighborhood...
somewhere that all the wrinkles have been ironed out and you can really know where the lines are.
If all lumped together (same HOA, or same name neighborhood, or same town, or same school district, both off So and So street, etc.) then when all the building is over, the lower price homes become worth more and the higher priced homes become worth less.
Like saying I live in SO and SO town but on the good side. Like it or not, you live in SO and SO town.
a) a 250k home is not a starter home. if the homes are nicely built, a small lot is
not an issue. many people like smaller yards to take care of.
b) if you are looking for value, you will find it in a resale, not in a new home.
c) if you want a decent answer, why not list the neighborhood and the builders?
One definition of starter home is not the subject. The subject is less expensive new homes being built beside or very close to more expensive ones like 100 Nice Dr for $350K and 180 Nice Dr for $250K. That would raise a few questions.
Also added to the issue is the factor if the builder is still building new then one cannot expect much appreciation in the value of their home as the builder is still offering a new and identical model down the street for less then most need/want to sell for, but another subject.
b) if you are looking for value, you will find it in a resale, not in a new home.
I would agree. Buying a new house is not unlike buying a new car. As soon as it becomes "used" the value often drops. Conversely, buying a re-sale means you're likely closer to a point where you'll have to make repairs like replacing the roof which can be very costly.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by manderly6
In some places you can barely by a small townhouse or condo for that much. Your blanket statement is just not true everywhere.
I have to agree, a starter house here is about $500,000.
Typically the higher priced homes will lose value when lower priced homes are built nearby so the OP is right to be concerned if looking at this as an investment. On the other hand, if it's a house and neighborhood you really like, with good schools, your investment will not yield as much but you will have a great place to live for a long time.
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